MUMBAI: The lenders’ consortium, led by Central Bank of India, has put on block a 95-acre prime land parcel in the nearby Thane, for the fourth time--with a reserve price of Rs 1,375 crore, which is much as 30% lower than the Rs 1,965-crore they had sought in June 2024 auction to recover their dues of close to Rs 3,920 crore from the bankrupt Goair.
The auction is scheduled for August 20. The land parcel was mortgaged as security against borrowings by Goair from a consortium of banks comprising Central Bank of India, Bank of Baroda (including exposure inherited from Dena Bank) and IDBI Bank.
The Nusli Wadia-promoted airline, which filed for bankruptcy on May 3, 2023, owes Rs 3,918 crore these three banks along, including principal and interest as of August 31, 2023, while it also owes Rs 2,600 crore to other financial institutions, taking the total to Rs 6,520 crore.
The bankruptcy, second in the domestic aviation industry after Jet Airway’s April 2019--forced primarily by a severe cash crunch due to the grounding of most of its Pratt & Whitney-powered aircraft for want of spare parts.
The airline has sought compensation from the engine supplier, but nothing has come out so far.
According to its bankruptcy filing, the airline had total liabilities of Rs 11,463 crore, including Rs 1,292 crore borrowed under the government's Covid-19 emergency credit line guarantee scheme, and Rs 2,660 crore to aircraft lessors, and Rs 1,202 crore to vendors and suppliers.
Among the lenders, Central Bank has the largest exposure of Rs 1,900 crore, Bank of Baroda (around Rs 1,300 crore) and IDBI Bank has Rs 50 crore. Other lenders included Deutsche Bank but its dues is not known.
Of the total Rs 3,918 crore of dues, the Central Bank’s share is a little over Rs 1,900 crore, its CEO Kalyan Kumar told TNIE on the earnings day last month, adding this is the fourth auction to dispose of the land.
This steeply discounted reserve price comes in a market that has been witnessing a steady jump in land prices, not just in Thane but across the Mumbai Metropolitan Region, the most costly real estate in the country.
Slashing the asking price by 30% in just two years highlights the difficulties of monetising distressed assets even in one of the hottest property markets.
According to a public auction notice by banks, the property located in central Thane will now be auctioned on August 20 under the Sarfasei Act.
It can be noted that a similar case was when lenders, led by SBI, tried to liquidate Vijay Mallya's real estate assets, as here too lenders were forced to progressively reduce reserve prices for both Kingfisher House near the Mumbai airport and Kingfisher Villa in Goa.